Final Rule Establishes New ICD-10 Compliance Date

Four months after President Obama signed into law a one-year delay in the ICD-10 code switchover, the Centers for Medicare and Medicaid Services has announced a final rule establishing October 1, 2015, as the new ICD-10 compliance date.

The final rule, scheduled to be published in the Federal Register on August 4, implements Section 212 of the Protecting Access to Medicare Act (PAMA) of 2014 which became law on April 1 delaying the ICD-10 implementation deadline from October 1, 2014 to October 1, 2015. The final rules executive summary acknowledges that many in the healthcare industry had invested time and resources in system upgrades, testing, training, and undertaking the necessary changes to workflow processes to meet the original ICD-10 deadline but argues that the new compliance date will help less prepared stakeholders.

This deadline allows providers, insurance companies and others in the healthcare industry time to ramp up their operations to ensure their systems and business processes are ready to go on Oct. 1, 2015, states CMS in a July 31 press release. While many providers, including physicians, hospitals, and health plans, have completed the necessary system changes to transition to ICD-10, the time offered by Congress and this rule ensure all providers are ready.

The one-year delay in the ICD-10 code switchover will take a financial toll on the healthcare industry, according to CMS, which estimates the cost to HIPAA covered entities will be $1.1 billion to $6.8 billion. However, the final rule from CMS concludes that a one-year delay--as opposed to a longer delay--will be the least costly and most fiscally responsible way to implement the requirements of section 212 of PAMA." Because a delay of longer than one year would slow or even stop progress towards ICD-10 implementation, the final rule establishes the shortest delay permitted by law, which is one year.

The response from stakeholders to the long-awaited announcement by CMS officially confirming the new ICD-10 implementation deadline was swift. In a statement, the American Health Information Management Association said it applauds the confirmation by CMS of October 1, 2015, as the compliance date for ICD-10. Now, everyone in the healthcare community has the necessary certainty to move forward with their implementation processes, including testing and training, according to AHIMA, which is analyzing the full text of the final rule to further assess the potential impact on its members.

The final rule not only establishes October 1, 2015, as the new ICD-10 compliance date but also requires the continued use of ICD-9-CM through September 30, 2015. ICD-9-CM contains outdated, obsolete terms that are inconsistent with current medical practice, new technology and preventive services and ICD-10 codes will provide better support for patient care, and improve disease management, quality measurement and analytics, argues CMS in its July 31 announcement.

We believe it is important to require implementation of ICD-10 as soon as the law permits because it will allow the industry to begin reaping the benefits of ICD-10 as soon as possible, states the final rule.